If you've ever been to Southern California, you've probably visited or at least heard about Venice Beach. A funky beach town where about 16 million people come to visit every year. A part of LA that's somehow different from the other upscale developments along the coast, a spot for surfers, skateboarders, street vendors and homeless people, but these days that's changing. I moved Venice earlier this year and I recently went on the Venice Garden and Home Tour. At one point I was standing on top of a piece of property that was probably worth several million dollars.

MCEVERS: So, I'm standing up here at this penthouse - you can just look right out over the ocean, you can also look right out over the Venice Boardwalk and just below here is a grassy area where people live and sleep. Like so many neighborhoods in U.S. cities Venice was pretty dicey in the 80s and 90s and now it's gentrifying. Think Williamsburg in Brooklyn, the Mission in San Francisco, the near Northwest side of Chicago, you know, what I mean.

UNIDENTIFIED WOMAN: There are two bedrooms to your left. Step towards them but not fully in them.

MCEVERS: Now the median income in Venice is rising - fast. And a lot of the homes on the tour are like this.

UNIDENTIFIED WOMAN: OK, so here's the spiel, 1915 original structures, front and back. Most of the furniture is original.

MCEVERS: When people in American cities talk about change and gentrification in these areas it's sometimes seen as a bad thing. Poor people get pushed out the argument goes and greedy developers move in but recent economic studies show that if a neighborhood has poor people, middle income people and wealthy people all living together, the people on the lower end have a better shot at moving up. That mix of people is called economic diversity but the question is how to maintain that diversity? And that's our cover story today.

(SOUNDBITE OF SONG, "ROOMING HOUSE ON VENICE BEACH")

JONATHAN RICHMAN: In the ancient girl was in my reach on my house in Venice Beach. In my house on Venice Beach.

MCEVERS: Let's start with the data, for the past several years a group of economist from Harvard, UC-Berkeley and the U.S. Treasury have been working on a landmark study on economic mobility. The idea was to ask if America really is the land of opportunity, if people really do do better than their parents. What they found is this varies widely from place to place. Cities with more upward mobility tend to have good schools, stable families, greater social capital and economic diversity. So does that mean you have a better chance at getting ahead if you live with people who are doing better than you?

NATHAN HENDREN: The short answer is yes.

MCEVERS: That's Nathan Hendren, one of the Harvard economists on the study. He says places with economic and racial segregation, basically where poor minorities are separated from everyone else, have some of the lowest rates of economic mobility. Cities like Atlanta, Charlotte and Milwaukee the study found.

HENDREN: If you're from a poor background, you don't want to be in an area where the poor are segregated from the rest of the population. Across the U.S. areas where rich and poor live together tend to have higher rates of mobility than areas where the poor and the rich are segregated.

MCEVERS: So far the research is just at the city level. Hendren says the team is looking at breaking it down further. But what we do know is that it's good to be in a mixed area. So, we decided to test the idea in Venice.

MCEVERS: Hi, how are you doing? Kelly.

MCEVERS: We went to see Tamika Donaldson. She makes about $50,000 a year as a nurse's assistant and supports here two teenage kids. She lives in a low income apartment building in Venice, literally blocks from the beach and the hipster restaurants.

MCEVERS: So how many bedrooms is this?

TAMIKA DONALDSON: Two. Yeah...

MCEVERS: Tamika says she and the kids used to live on a street in another part of the city where everyone around them was poor. But she didn't like it, so she applied for new housing. Seven years ago a woman with a nonprofit housing organizations matched Tamika with a subsidized apartment in Venice.

DONALDSON: And I was like, well the place is too small and she kind of was like, well you sacrificing space but you basically going to get, you know, the diversity and different cultures living in the neighborhood.

MCEVERS: Tamika finally gave in. The apartment, so small she has to sleep on the floor in the living room with one teenager in each bedroom but she says, it's worth it. Tamika says she gets more exercise in Venice walking and biking on the beach. There are more services, clinics, tenant groups, job-training and afterschool programs for the kids. She says her son took a photography class and sold his stuff at an auction. She says living around people who are doing better makes her and the kids feel more confident.

DONALDSON: I think that it helps to keep kids motivated, you know, 'cause kids they want things and they see things and maybe if they see, you know, people around them having things maybe it'll make them try a little bit harder. That's what I hope.

MCEVERS: Of course not all low income families in LA have the option to move to Venice like Tamika. In fact many low income families who live in Venice are being pushed out. The law says that there's a limit on how much you can raise someone's rent. But tenants groups told us landlords do all kinds of things, like not fixing apartments so old tenants will move out and new tenants who have to pay market rate will move in. Middle-class tenants just get priced out. Mike Bonin rented a place in Venice for 18 years.

MIKE BONIN: When it was time to buy a house, when I got out of my thirties, I couldn't afford Venice.

MCEVERS: Now Bonin serves on the Los Angeles City Council representing Venice and the surrounding neighborhoods. We went to see him at his office. Bonin says he worries that as Venice develops it will lose its economic diversity.

BONIN: There's very little the city can do to wave a magic wand to say that economic developments are going to stay frozen in time and rents are going to stay frozen in time and property values are going to stay frozen in time.

MCEVERS: But Bonin says there are things the city can do to mitigate that.

BONIN: We can certainly build more affordable housing. We can certainly do a much better job of preserving the affordable housing that's there and we can certainly do a better job of making sure that the affordable housing that is being required to be built is maintained and kept and being used as affordable housing.

MCEVERS: Bonin says developers might say they're building affordable housing but there's little way to enforce that. He says there is one other thing that gives him hope.

BONIN: There's so many folks who are moving in - they're sort of entrepreneurial and they're problem solvers by nature.

MCEVERS: You mean the techies?

BONIN: Yeah, a lot of the techies and they're like, you know, how can we help? And they're not wedded to a worldview when they come into it - they're like how do we fix this?

MCEVERS: So many tech companies are coming to Venice; they're starting to call it silicon Beach. Google's LA office is in Venice and is now doing a big expansion. Other companies like Snapchat are there too. Most diehard Venetians are skeptical these young entrepreneurs will do much to help the neighborhood stay mixed. But Bonin says he's pushing them to tweak existing programs, to create things like an Airbnb for low income housing. That Harvard study we talked about shows that American cities that have only very rich people and very poor people do not have good economic mobility. Bonin says the question is whether Venice becomes one of these places or remains a mixed place, where someone like Tamika can have a better life. This is NPR News. Transcript provided by NPR, Copyright NPR.